Sunday, October 28, 2012

It is not the failure of the regulations that is the problem but their
basic design. They have caused people to focus on the most expensive
ways of mitigating climate change, rather than the cheapest, imposing
high costs for little gain. Moreover, by concentrating on their own
carbon production, and how to reduce it, Europeans have ignored the
impact of their continued demand for goods made using carbon- intensive
processes. Since Chinese and Indian manufacturing is usually dirtier
than Europe’s, the real upshot of Europe’s choices has been an increase
in global emissions. The regulatory approach, argues Mr Helm, has got
the worst of all worlds. It is expensive, it has not cut emissions and
its treaties are unworkable. No wonder the public is growing sceptical.

Leaving aside the question whether making the WTO reconsider its guiding principles for the sake of the climate is really less impossible than agreeing on a global cap:

How do you assess the "CO2 emission contents" of a product?

1. Just use energy contents times CO2 emission factor (average of the originating economy)Lots of problems can show up here (What if Kia Motors goes all green but Taiwan as a whole doesn't?). But anyways,

2. How to determine the energy contents, of, say your Kia Sorento arriving at an EU port?Energy for transport of the car, for assembly at factory, for transport of parts to factory, for manufacturing of parts, .... some recursion happening here, down to the pre-cursors (made in EU) of the pre-cursors (made in China) of the plastic of the fender.

Trying to implement this, you'd create a bureaucratic monster of calculation rules, attached to an enormous database about production processes and materials in the need of constant updating (with partly confident information).

OK, loose precision, use rules of thumb. But how unprecise can you get before this really becomes almost arbitrary protectionism?

I really hope to overlook the simple solution here, as a decoupling of advanced societies from the pressures of the global market generally appears to be a good idea to me too.

Dieter Helm advocates the use of gas as an interim energy source. The fight is on within the UK govt of how to plug the energy gap which will arise in the coming years if no big investments in power generation are made. Part of the environmentalist lobbying firmly opposes the dash for gas, for example this article in today's Guardianhttp://www.guardian.co.uk/environment/damian-carrington-blog/2012/oct/29/gas-energy-protest

The argument is that US shale gas expansion has led to a fall in coal prices and increasing exports of US coal to Europe. So the amount of dirty energy is growing and gas is to blame. Neat. What a feat of logic!

@hvw. It is hard to answer your questions with certainty, I have not made a study out of the idea, but I am a bit more optimistic.

The WTO is always blocking when it comes to ethical, social or environmental standards. That is why we would need an international treaty to allow regions to press ahead with combating climate change.

I would expect that it should be sufficient to tax a small part of all products with a high indirect energy content. To simplify matters we could just take the energy needed to produce the materials into account and ignore the rest. I would hope that that would give sufficient protection to the local industry. For these materials you could assume an average energy intensity to produce then, but allow the producer to proof that he was able to produce them more efficiently.

I do not think it would make import taxes that more complex. Already every product has its own tax rate. I just say: Bünderfleisch.

I have not read the book, but it seems Helm is pointing in a similar direction as Pielke Jr. who advocated a Carbon Tax and its use for financing research (which wouldn´t happen, given our ever-hungry-for-money govts).

hvw is right in principal about the obstacles for a CT. I have not followed up on developements in Australia recently - but didn´t they implement a CT? Possibly, one could get some insights from their approach?

Anyway, looking at the mess e.g. the Renewables Act (EEG) is creating in Germany, it might well be worth to face the fact current approaches might leave room for approvement.

The Guardian piece is a case in point many acitivists appear not to be interested in anything less than a "Grand Solution", preferably of the type "No energy use by anybody except WE allow it".

The critique voiced here is so naive one needed to do a 2,000+ word essay just to identify and dissect the underlying implicit - and not very clever - assumptions.

Instead of attending some churnalism school, it ought to be compulsary for these writers to work with a medium-sized, internationally actice company for a couple of years before being granted access to a keyboard. Might help to keep in touch with basic economic realities.

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